SEC Moves U.S. Closer to International Financial Reporting Standards.

• Author: Heffes, Ellen M.
• Position: Financial reporting - United States. Securities and Exchange Commission

This is the first of what is a new section of the Financial Reporting column that focuses on the business implications of United States companies moving from U.S. generally accepted accounting principles to International Financial Reporting Standards.

Among the subjects the section will cover are:

* What do the changes mean for companies overall?

* How will IFRS impact business processes such as mergers and acquisitions; contractual arrangements; tax and accounting; auditing; etc.

* What is the challenge of synergizing cross-industry and government agency regulation * and compliance?

* What is the reaction of markets and users, such as investors, lenders, analysts, etc.?

* What are the communications/investor relations challenges?

Primary authors of the section will be Cheryl de Mesa Graziano, vice president-Operations for Financial Executives Research Foundation (FERF), and Ellen M. Heffes, editor-in-chief of Financial Executive.

Graziano and Heffes will call upon a variety of sources to gather and report relevant information. These sources will include: FEI's technical committees, the Corporate Roundtable on International Financial Reporting (CRIFR), which is described below; experts in specific subject areas; and preparers who have experience filing financial statements using IFRS.

The SEC Announces 'Roadmap'

In an open meeting in late August, the U.S. Securities and Exchange Commission voted to publish for public comment a proposed "roadmap" that could lead to the mandatory migration of all U.S. issuers filing financial statements in U.S. generally accepted accounting principles to International Financial Reporting Standards by 2016.

The roadmap provides for voluntary early adoption 2010 filings for periods ending after Dec. 15, 2009, for certain companies. The multi-year plan also sets out several milestones that, if achieved, could lead to the use of IFRS by U.S. issuers in their filings with the commission. One of those milestones includes an SEC decision in 2011 on whether adoption of IFRS is in the public interest and would benefit investors and, ultimately, whether to move ahead with the mandatory 2016 date for full adoption.

In anticipation of the impact of the roadmap on the finance profession, FEI is embarking on a series of initiatives within its strategic plan that includes delivery of IFRS-related information to members and to the general financial-executive community. One of those initiatives is the introduction of this...